BGC Counters CME’s GFI Offer – Raises the Bar to $6.10

BGC has raised the stakes for GFI as the battleground between the two trading institutions takes a new turn, with

GFI_Group_Logo_squareThe ongoing acquisition war between CME and BGC has been forcing the acquisition price higher; BGC’s current counterattack pushes the price to above six dollars, with the firm issuing an all-cash offer of $6.10.

BGC reinforced its earlier notion of pushing CME to the side and urged shareholders to vote against the Chicago-based trading venues bid.

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The two firms have been engaging in a price war for GFI. BGC also extended the expiration date for the tender offer to 5:00 PM ET on February 3, 2015, unless extended. The current offer corresponds to an earlier offer put forward by the CME today for $5.85 a share.

Howard Lutnick, chairman and chief executive officer of BGC, commented in a statement: “We are fully committed to completing this transaction and our revised offer is clearly superior to the current agreement in place between CME and GFI management.  For too long the GFI special committee and board have failed to act in the best interest of all GFI shareholders and have instead chosen to focus on outrageous, deceptive and self-serving arguments made by GFI management.

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“We continue to remind GFI shareholders to vote against the proposed $5.85 CME/GFI management stock and cash transaction at the January 27, 2015 special meeting of shareholders and also urge them to tender their shares into our obviously superior all-cash offer. We are prepared to move quickly to complete our fully-financed tender offer and deliver the higher value to which GFI shareholders are entitled.”

Additional details issued by BGC state that it is delivering an executed agreement to the board of GFI that, if countersigned by GFI, provides that BGC would increase its fully financed, all-cash tender offer to acquire all of the outstanding shares of GFI by an additional $0.10 per share.

In addition, a copy of the tender offer agreement will be filed with the Securities and Exchange Commission (SEC).  As previously announced, BGC has also filed a proxy statement with a GOLD proxy card with the SEC in order to solicit votes against the inferior CME transaction at the January 27, 2015 GFI special meeting. GFI shareholders can vote against this transaction by returning the GOLD proxy card from BGC or by voting “against” using the materials provided by GFI.

Mr. Lutnick concluded: “We remain confident that BGC’s stockholders and bondholders will benefit from a combination of GFI and BGC, as it will result in increased productivity per broker and meaningful synergies, which should enable us to increase revenues, profitability, and cash flows, while maintaining our investment grade rating. We also continue to believe that GFI’s customers, trading counterparties, vendors, brokers, and support staff would all benefit from GFI’s wholesale brokerage becoming part of a much larger, better capitalized, and more diversified company.”

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